Carnival forecasts loss in 2022 on surging fuel prices



FILE PHOTO: The Queen Mary 2 cruise ship by Cunard Line, owned by Carnival Corporation & plc. is seen docked at Brooklyn Cruise Terminal as the Omicron coronavirus variant continues to spread in Brooklyn, New York City, U.S., December 20, 2021. REUTERS/Andrew Kelly/File Photo

March 22, 2022

(Reuters) -Carnival Corp on Tuesday forecast a loss for the year as the U.S. cruise operator’s efforts to gradually restart operations after a long pandemic-led hiatus face a setback from a surge in fuel prices due to the Russia-Ukraine war.

Analysts expect rising fuel costs to temper near-term operating results for the company. Jefferies estimates fuel costs to be 8-10% higher than previously anticipated for the first half of 2022, and 10-11% higher for the second half.

Carnival has modified its trips to avoid halts at Russian ports in the summer and added on Tuesday the cruises already scheduled to call on Russian ports in the remainder of the year would also be withdrawn.

The owner of Cunard and Holland America cruise lines reiterated a net loss for the second quarter, but forecast a return to profit in the third quarter as it resumes to full capacity and booking trends improve.

The company said it had resumed 75% of its guest cruise operations capacity, and expects to have its full fleet back in the summer with a positive monthly adjusted earnings before interest, taxes, depreciation, and amortization.

The company also posted weaker-than-expected first quarter revenue and profit, as Omicron impacted bookings for its near-term sailings, including higher cancellations resulting from an increase in pre-travel positive test results.

The cruise operator’s revenue rose to $1.62 billion in the reported quarter, from $26 million a year earlier, below analysts’ average estimate of $2.26 billion, according to IBES data from Refinitiv.

Excluding items, the company posted a loss of $1.66 per share, compared with analysts’ expectation of a loss of $1.26.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli)





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